Whenever I want to talk about bonds, I always know just who to call. Larry McDonald is a former bond trader at Lehman Brothers and author of the book, Colossal Failure of Common Sense. I highly encourage you to give it a read, especially if you're looking for some perspective on what really happened back in 2007-2008.
It's no coincidence that I reached out to him to come on the podcast. Larry and I had a very timely conversation in February of last year. So with the bond market recently losing 5-6 Trillion dollars in such a short period of time, who better to talk to than by favorite bond trader.
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories, along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
Every major asset class on Earth continues to illustrate risk-taking behavior on the part of market participants.
Yields, Oil, Equities, Base Metals, the Australian Dollar -- there's an overwhelming amount of new highs in offensive areas of the market right now. The weight of the evidence continues to suggest that we want to bebuyers, not sellers, of stocks.
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
We continue to harp on the risk-on themes that support our bullish macro thesis.
If you're ignoring the Indian Stock Market, I think you're doing yourself a huge disservice.
Even if you never plan on trading stocks in India at any point in your life, it doesn't matter. There's amazing information coming from there.
For example, take a look at that relative strength in Indian Bank stocks before US Stocks, and Stocks in general, rallied throughout 2019. That was an epic rally, if you recall.
The Indian Banks had already been telling us that it was coming!
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
Leadership in this environment is stretching far and wide.
We're seeing a growing number of industry groups and areas not only making new highs but also outperforming and offering us more and more avenues to express our bullish thesis on stocks and risk assets in general.
The point is, with such an overwhelming amount of leadership these days, we can be picky and place our bets on only the best of the best in each group.
In today's post, we'll explore a hot new growth industry we haven't covered in much detail yet - Autonomous Vehicles.
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
In last week's report, we played "devil's advocate" and laid out some of the more bearish developments we could find out there.
But all-in-all, the market is still providing bears less room to make a sound argument. We continue to find that any bearish evidence is primarily isolated to shorter timeframes... and even then, still overwhelmed by the abundance of bullish data points.
From the desk of Steve Strazza @sstrazza and Grant Hawkridge @granthawkridge
They say the Bond Market is where the smartmoney is. Maybe it is. I have no idea.
What I do know is that it's where a lot of the smart information is.
Due to the diversity among credit instruments, there is a swath of unique data that we can use not just for Bond prices and Interest Rates but also to glean insight into other asset classes.
I'm talking about things like TIPS for inflation expectations and Emerging Market or High Yield Bonds to analyze risk-appetite for other assets such as the stock market.
Alpha has been in Equities and risk-assets for a while now. As such, we haven't needed to discuss bonds from a portfolio perspective... but that doesn't mean we aren't paying close attention to these assets.
The Bond Market is overflowing with information. We'd be foolish to neglect it.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
As we discussed in our latest report, bears are running out of any substantial fuel to support their position.
And despite the arrival of some long-awaited selling pressure last week, that absolutely remains the case.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
We continue to experience a bullish expansion in participation from stock markets around the world.
Just a few days ago we discussed buying Israeli stocks and explained how their strength at the index level was being driven by their heavy exposure to Technology.
Mega-Cap Growth and Tech stocks (we're including Communications and Discretionary here -- "Tech but not Tech" names such as Alibaba, Tencent, Meituan, JD.Com, etc.) are also a dominant market force in China.
We wrote about this exact topic in November, and how strength from these names would likely continue to propel these Large-Cap Chinese Indexes and ETFs higher. The Chinese Tech ETF $CQQQ and iShares Large-Cap China ETF $FXI tacked on an additional 24% and 12%, respectively in the time since.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
Last week's Mystery Chart was the Israeli Tel Aviv 125 Index zoomed all the way back to the start of this century.
You might be wondering why we're discussing Israeli equities of all things...
The short answer: They're making new all-time highs.
In this post, we explore the sector that is mainly responsible for these gains, dive into its strongest components, and outline some long ideas with risk/reward setups skewed in our favor.
Not only is this yet another group of stocks we can use to express our bullish thesis on risk assets -- it is also excellent information. Once again, we're seeing another development pointing to the increasing participation and improving breadth across international equity markets.
This move in Israeli equities also fits into a larger theme that is taking place beneath the surface for stocks all around the world. It's difficult to overstate the significance of these moves.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.
As we discussed in last week's report, bears have a lot of work cut out for them.
With all this rotation into offensive groups and cyclical areas of the market, they are really running out of talking points. We literally can't find a meaningful group of stocks in the US or even abroad that we would want to short at this point.
This is excellent information as it's not something we can say very often... and it's bullish, just to be clear.
